Lakeland City Audit Exposes Claim Fraud Totaling $183,000

A criminal investigation is under way after a city of Lakeland external audit linked $183,000 in suspected fraudulent claims to a Summit Consulting, LLC claims adjuster, officials said.

By MARY TOOTHMANTHE LEDGER

LAKELAND | A criminal investigation is under way after a city of Lakeland external audit linked $183,000 in suspected fraudulent claims to a Summit Consulting, LLC claims adjuster, officials said.The Summit employee had been processing Lakeland's automobile and liability claims from the city's risk management offices since 2005.City officials said Friday auditors began to dig deeper when an external claim file could not be found during the yearly audit process, even though a claimant had been paid. Further investigation showed that a number of checks had been written and made payable to various names similar to the name of the Summit employee, they said.Summit Consulting administrators were notified, and a forensic audit was formally initiated on Feb. 25 with the firm Crowe Horwath LLP, Summit has worked closely with city administrators during the process.The name of the claims adjuster has not been released. The $183,000 in questionable claims were identified from checking records dating from 2008 through this year. A review is still under way to see whether more false claims could have been processed between 2005 and 2008.The forensic audit will include an explanation of how faulty claims were likely processed and how fraudulent checks were able to be issued. The city also is reviewing historical safeguards used with third-party administrators to determine whether additional stringent accounting standards could help minimize and detect fraudulent activity, officials said.City lawyer Tim McCausland said Summit agreed to cover all losses and expenses that may have occurred, and to pay for the forensic audit. "Fortunately, we have a solid and responsible vendor," he said. "The system worked the way it's supposed to work."Mayor Gow Fields agreed. "I think this is a demonstration that the checks and balances did work. And where we could see opportunities to make improvements, they have now been put in place. Summit has been a stellar vendor. They stepped up right away."Representatives for both the city and Summit Consulting, LLC, declined to name the claims adjuster, who is no longer working out of the city's risk management department offices. "It's our policy not to discuss employment issues," said Summit spokesman Chris Goetcheus. "Summit has a long-standing partnership with the city of Lakeland and values its relationship greatly. We are working closely with the city and law enforcement to address this important matter."Fields said the city's contract with Summit remains intact.The discovery of such a breach is unusual, McCausland said. "This doesn't happen to the city very often. The government is just very tightly controlled from a financial standpoint," he said. "We have annual audits; we have internal auditors that are constantly testing transactions; it is just unusual in our world that something like this would happen."The Crowe Horwath audit is expected to be completed by the end of this month. The case has been referred to the Lakeland Police Department for investigation while auditors continue to check over claims records.

[ Mary Toothman can be reached at mary.toothman@theledger.com or 863-802-7512. Her Twitter feed is @MaryToothman.]